Generic Drugs In The Earnings Spotlight: Mylan And Valeant Pharmaceuticals

• Upcoming earnings highlights include the latest results from two generic pharmaceutical giants.
• Wall Street analysts are looking for earnings growth from just one of them.
• However, sequentially higher revenues are anticipated from both companies.

On Tuesday, international generic pharmaceutical giants Mylan NV MYL and Valeant Pharmaceuticals Intl Inc VRX are scheduled to share their latest earnings results. Analysts on average see the earnings going in different directions, though.

Wall Street's consensus forecast for Mylan, a top producer of active pharmaceutical ingredients for generic drugs, is for earnings per share (EPS) to have risen about 20 percent from the same period of last year to $1.14. That estimate is the same as it was 60 days ago, and the range of individual estimates is $1.01 to $1.20. The consensus of 11 Estimize respondents calls for $1.16 per share for the second quarter, which ended in June.

Estimize overestimated Mylan's revenue back in the first quarter, and this time respondents are looking for $2.59 billion, which would be almost 9 percent higher than in the year-ago period. Wall Street is in the same ballpark with its consensus forecast set at $2.57 billion. Like Estimize, Wall Street has overestimated the top line in the past few quarters, but so far the analysts expect nearly 16 percent revenue growth for the full year.

Related Link: Q2 Earnings Report Card: Biotech

Valeant is still under SEC investigation over its pricing, and when it shares its second-quarter results, the Wall Street forecast is that its EPS will have tumbled 42 percent year-over-year to $1.48 per share, on $2.46 billion in revenue, which would be a nearly 10 percent decline. However, the consensus estimates also represent top and bottom line gains over the first quarter.

The forecast from 96 Estimize respondents sees EPS from the Canadian maker of generic drugs and over-the-counter products coming in at $1.67. Also, revenue is expected to total $2.60 billion for the three months that ended in June. Note that Estimize overestimated per-share earnings but underestimated revenue in the previous two quarters.

Valeant Pharmaceuticals is scheduled to report its results before the opening bell on Tuesday, while Mylan is expected to post its numbers later on the same day.

While many of the S&P 500 have already posted their latest earnings numbers, the season is not over yet. Other high-profile companies that Wall Street analysts expect to show at least some earnings growth when they report this week include Coach, Hertz Global, News Corp., Petrobras, Tyson Foods and Walt Disney.

The consensus forecasts call for per-share earnings at Kohl's, Macy's and Nordstrom to be smaller than a year ago. A net loss is in the cards for J.C. Penney and SolarCity, if the analysts are correct.

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At the time of this writing, the author had no position in the mentioned equities.